/ Sunday, April 20, 2014 / Categories: PMA, Statistics The PMA Monthly Business Cycle Index (PMABCI) - April 2014 April Brings a Dip in the Business Cycle The PMA has released the results of PMA Business Cycle Index (PMABCI) for April 2014. The PMABCI is a monthly index which aims to capture the state and evolution of economic activity in Palestine by noting performance of the industrial sector, especially fluctuations in production and employment levels and implications for the economy at large. The construction of the indicator is based on qualitative data obtained from monthly business surveys of a representative sample of industrial institutions’ owners/mangers on the value of various leading indicators during a specified period, and their expectations for the coming months. After that, the data is processed to construct a quantitative PMABCI. During April 2014, the overall PMABCI witnessed a decline, dropping from 8.55 in March to around -0.56 this month, as a result of the deterioration in the West Bank (WB) index, and despite the relative improvement in Gaza Strip's index. Also, compared to the corresponding month of 2013, the overall PMABCI has declined relatively (see the attached figure). The WB index has deteriorated from 15.98 to around 2.68, due to the decline in all industrial activities (except for the leather activity), specially the deterioration in food sub-sector from 2.82 to around -2.59 this month. In spite of that, the WB index in April is still had a better performance compared to the corresponding month last year. However since the beginning of this year, data also indicates more optimism about the near future among industrial firms, as a result of continuous U.S efforts to stimulate peace negotiations between Palestinians and Israelis, and decreased fears concerning the possibility of more deterioration in the security conditions in the future. In GS, the index has relatively improved from -22.59 to around -9.41 during the comparison period. Although most industrial activities have shown either decline or stagnation, the relative recovery in the food industry (which forms around one third of GS's industry, and which recovered from -20.54 to 0.0) has significantly contributed to the improvement of GS's index this month. It is noteworthy that GS index has suffered a remarkable drop since the beginning of this year, reflecting the continuous deterioration in economic, political and security conditions in the strip, mainly because of the political tensions with Egypt, and its effects on overall economic activity, especially increased restriction on the movement of goods and individuals. But it is worth to mention that GS has witnessed a relative improvement in movement and access of goods and individuals, due to less closure days since late March. Also, the Ministry of Economy in Gaza has recently broadened the list of goods that are prohibited to be imported from Israel, as part of its "imports substitution" strategy. Such step has significantly improved the domestic demand, especially in the food industry. Inspite of that, data still indicates high pessimism about the future among the Gazan industrial firms, but with a relative improvement this month compared to the previous month. However, GS index is exposed to further deterioration as the economic and security conditions keep worsening. It is important to notice that the maximum value of this index is positive 100, while the minimum is minus 100; a positive value indicates favorable economic performance, and the bigger this value, the better the economy is. But if the value is negative, then economic performance is worsening the closer it gets to minus 100. On the other hand, a value close to zero indicates that economic performance did not change and is unlikely to do so in the near future. Previous Article PMA Receives Student Delegation from Al Azhar University in Gaza Next Article Signature of Memorandum of Understanding between Financial Follow-Up Unit and Palestinian Anti-Corruption Commission for Combating Money Laundering Print 4893